Question: 1. Explain how open-market operations work. 2. Explain the difference between the discount rate and the federal funds rate. 3. Explain how lowering the reserve

1. Explain how open-market operations work.

2. Explain the difference between the discount rate and the federal funds rate.

3. Explain how lowering the reserve ratio affects the economy.

4. Explain each of the following in terms of whether they were discretionary fiscal policy, non-discretionary fiscal policy, or monetary policy: TARP, the AIG bailout, the 2009 stimulus package and the rapid increase in unemployment compensation spending.

5. Explain how Fed policy can favor financial interests or the interests of workers.

6. Why might an agreement like NAFTA increase GDP but not be favored by union members?

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